Kenya Anti-Corruption Commission vs. Frann Investments Limited, Francis Githui Wahome, Ann Gathoni, Victor Wahome, Edward Kagume, David Mwangi, Wilson Gacanja [2020] eKLR

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In the Environment and Land Court at Mombasa; ELC No. 215, 216, 217, 218, 219, 220, 221, 222, 223 and 224 of 2009 (Consolidated); Kenya Anti-Corruption Commission vs. Frann Investments Limited, Francis Githui Wahome, Ann Gathoni, Victor Wahome, Edward Kagume, David Mwangi, Wilson Gacanja (1st – 7th Defendants respectively)

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Summary Significance:

This is a suit for recovery of illegally acquired public land MN/III/293 belonging to Kenya Revenue Authority (KRA) and reserved for use by the Customs Department. The land was illegally and fraudulently allocated, subdivided and transferred to private individuals. The court held that the land was alienated public land and that the Defendants’ titles at allotment or upon transfer were null and void. Consequently, all downstream transactions, including subdivision, being based on a title that is null and void, carry no proprietary interest, and are themselves also null and void. The court further held that the doctrine of an innocent purchaser for value cannot be used to sanitise a title that is null and void ab initio and neither can it breathe life into a null title.

Applicable laws:

Section 3 of the Government Lands Act Chapter 280 Laws of Kenya

Brief Facts:

The land parcel MN/III/293 measuring 0.4047 Ha was originally reserved, planned and used as a customs outpost/watchtower and guard house of the then Department of Customs. Prior to the illegal acquisition of the suit land there were two houses which were used as guard houses for the members of staff of the then Department of Customs, a Customs Watchtower, and a well for drawing water. On 14 September 1994, Mr. Ali applied to the Commissioner of Lands, through the District Commissioner, Kilifi, seeking to be allocated the property, on the grounds that he had “done a lot for KANU” but “has not enjoyed the fruits of uhuru.” The then acting District Commissioner noted on the face of the letter that there were two customs houses on the land. He also referred to a letter dated 23 September 1994 from the Registrar of Titles, which noted that on the said land stood “the old customs house.” The Commissioner of Lands issued a letter of allotment to Mr. Ali despite the fact that the land was alienated public land. The 1st – 3rd Defendants acquired the land through purchase of allotment interest from Mr. Ali, had the land resurveyed and given a new number MN/III/2974 and then subdivided it into 10 parcels, MN/III/3650-3659, that were either developed or transferred to other private persons. The 2nd Defendant was an employee of KRA in the Customs Department. The KRA did not consent to the transfer and when it was alerted of the illegal transfer, it put a caveat emptor on the property. The 4th – 6th Defendants contended that they were innocent purchasers for value without notice of the reservation of the land and that they had developed the land. The Commissioner of Lands (7th Defendant) contended that in allocating the said land, he was exercising powers delegated to him by the President according to provisions of Government Lands Act Chapter 280 Laws of Kenya.

Issues for Determination:

I.Whether the suit property was available for alienation to Mr. Ali and subsequent transfer to the 1st and 2nd Defendants.
II.Whether the 7th Defendant acted ultra vires and was personally liable for fraud and illegality
III.Whether the 1st to 6th Defendants were innocent purchasers for value without notice.

Holding:

The Court noted that the law was rather grey on whether land that had been set apart for use for a certain public purpose, but where no lease or allotment letter had previously been issued, could be allocated to an individual for private use. Further where Government land had been specifically assigned for a specific public purpose, so long as that public purpose remains, that land ought to be considered to be part of Government land that cannot be alienated to private individuals for private use. The Court posed this question: “But does it mean that because the Government has not issued an allotment letter to such land, to say a Government parastatal or Government Department, and has not issued a title to the body that is supposed to make use of the land, then the said land can be allocated to private individuals for private use? I do not think so. If this was to be the position, then developed infrastructure including roads, hospitals, schools, and even courts could be allocated to private individuals simply because no allotment letter or title had been issued. People would literally loot and grab all public infrastructure”. The court thus held that so long as land had, or has been, set aside by the Government for specific use, which use is apparent from the pertinent records, including survey plans and/or PDPs, or visible on the ground, then that land must be considered to be part of “alienated Government land.” In addition, the court held that the Commissioner of Lands had no power to allocate the disputed property and the allocation of it to the first allotee was not within his delegated powers as provided for in Section 3 of the GLA. Therefore, the allocation of the land was an illegal act on the part of the 7th Defendant who was personally culpable on grounds of fraud and illegality as decided in the case of Ethics and Anti-Corruption Commission vs Judith Marilyn Okungu & Another, Court of Appeal at Nairobi, Civil Appeal No. 183 of 2014. On the issue of whether the Defendants were innocent purchasers for value without notice, the court held that the Defendants were not innocent purchasers for value as the 2nd Defendant was an employee of KRA in the Customs Department and a custodian of the suit property. Further, the doctrine could not be used to sanitize a title that is null and void ab initio and neither can it breathe life into a null title. In conclusion, the court found that that the conversion of and renumbering of LR No. MN/III/293 to LR No. MN/III/2974, and creation of subdivisions thereof were ultra vires, irregular, fraudulent, and illegal and consequently null and void; the making of a grant in respect of LR No. MN/III/2974 to the 2nd Defendant was ultra vires the 7th Defendant’s statutory powers, irregular, fraudulent, and illegal and consequently null and void; that the register be rectified by cancellation of the grant to the 2nd Defendant and subsequent transfers in respect of LR Nos. MN/III/3650, 3651, 3652, 3653, 3654, 3655, 3656, 3657, 3658, and 3659. In addition, the 7th Defendant was found to be in breach of his fiduciary duty and position of trust and was condemned to pay general damages in the sum of Kshs. 1,000,000/=. Finally, the Defendants were ordered to give vacant possession of the land and to remove all the structures on the suit property within 30 days at their own cost and meet the costs of the suit.

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